We have translated a further CRA ruling released last week and 5 CRA interpretations released in April of 1999. Their descriptors and links appear below.

These are additions to our set of 3,580 full-text translations of French-language Technical Interpretation and Roundtable items (plus some ruling letters) of the Income Tax Rulings Directorate, which covers all of the last 27 years of releases of such items by the Directorate. These translations are subject to our paywall (applicable after the 5^th of each month).

CRA found that the post-2006 version of the s. 94 rules applied where a factually non-resident trust or its wholly owned subsidiary subscribed for shares of a resident corporation prior to 2007 with no election being made for an earlier application date. In this regard, CRA noted that the definition of "contributor" contemplated testing that status based on contributions made to a trust at any time before the testing time. Thus, the pre-2007 contribution would be by a “contributor” to the trust (unless an exempt person) - and such contributor, if also resident in Canada at the testing time, would generally be a "resident contributor" to the trust.

Furthermore, the deemed contribution rules in s. 94(2)(a) or (g), which reference their application “at any time” could also be triggered on the basis of deemed contributions occurring before the trust's 2007 taxation year.

CRA also confirmed that, by virtue of s. 4.3 of the Income Tax Conventions Interpretation Act, a trust which is deemed to be resident in Canada pursuant to s. 94(3) will be a resident of Canada and only of Canada for treaty purposes.

Neal Armstrong. Summaries of 24 March 2026 External T.I. 2025-1061181E5 under s. 94(1) - contributor and Income Tax Conventions Interpretation Act, s. 4.3.

CRA found that a partner was required to include in computing its income the amount allocated to it by the partnership as a loss from its business (presumably reflecting the deduction by the partnership of discretionary deductions), rather than the partner having the discretion to not include that loss in computing its income under s. 3. CRA stated:

[C]laiming a deduction in computing a loss from a source and including the loss itself from a particular source in the computation of net income for the year are two distinct concepts. The fact that one (i.e. claiming a deduction) may be discretionary does not lead to the conclusion that the other (i.e. including a loss) is also discretionary.

Where taxpayers have discretion in respect of the utilization of a loss, it is expressly provided for under the relevant provisions of the Act, such as subsection 111(1) … . Such discretion is not provided for in respect of current-year losses under paragraph 3(d) … .

Neal Armstrong. Summary of 20 March 2026 Internal T.I. 2025-1061521I7 under s. 96(1)(g).

Derksen J. found that the taxpayer was not entitled to claim ITCs respecting his construction expenses of a new home that he had sold in December 2020 because they were incurred while he was not yet a registrant. However, he could (and, in fact, at a subsequent juncture, did) claim a rebate under s. 257 for the same expenses.

Derksen J. further found that if the taxpayer had filed a rebate application under s. 257 at the time he was assessed in June 2021 to deny those ITCs, he would have been entitled to it. Accordingly, s. 296(2.1) required the CRA to take such a rebate amount into account when assessing the taxpayer before the rebate application had in fact been made. Consequently, having regard to the similar issue in Villa Ste-Rose, the quantum of the late filing penalty assessed against the taxpayer under s. 280.1 (for filing his December 2020 return over a year late) should be reduced accordingly.

Neal Armstrong. Summary of Fadali v. The King, 2026 TCC 86 under ETA s. 123(1) – builder – (f) and s. 296(2.1).